We have commended the Centers for Medicare and Medicaid Services (CMS) on this blog in the past for actions regarding Accountable Care Organizations (ACOs) – but we’ve also noted the need to establish strong enough criteria to ensure that this new model will be implemented in ways that deliver on the promise of better coordinated, more patient-centered care that gives us improved value for our health care dollars. That is why we applaud the launch of the Pioneer ACO program by the Center for Medicare and Medicaid Innovation (CMMI). It exemplifies the kind of innovation and testing we need to forge a path out of the current dysfunctional system.

Certainly, the nation has few higher priorities than to leave behind a health system that often fails to coordinate patient care, bringing poor clinical outcomes, miserable patient experiences, duplication, waste, errors and skyrocketing costs. The financial security of families and the economic viability of our nation depend on replacing the current payment system, which rewards volume of services regardless of whether those services are appropriate or beneficial to patients.

We need a fundamental transformation, and Pioneer ACOs have the potential to significantly change the way providers coordinate, collaborate and share accountability for the patients they serve. But the true test of whether these ACOs deliver on their promise will lie in both the spirit and specifics of how they are implemented.

The Pioneer ACOs improve upon the Medicare Shared Savings Program announced in October in a number of ways that can more quickly advance the transformation we need:.

It has stronger financial incentives – e.g., a higher level of shared savings and risk that can move us more quickly away from fee-for-service to population-based payment to strengthen accountability for both quality and cost.

Requirements for the meaningful use of electronic health records (EHRs) by the majority of the ACO’s primary care providers will spur more rapid adoption of EHRs which, in turn, should facilitate care coordination across providers and settings, help clinicians improve patient outcomes, and enable patients to engage more actively in their care.

It encourages public-private alignment. We agree with the CMMI that ACOs will be more successful if the participating providers see this as their core business strategy rather than as a siloed experiment limited to a select group of patients. The requirement for Pioneer ACOs to enter similar contracts with other payers (such as commercial insurers, employer health plans and Medicaid) reinforces this. It is important, however, that CMS not allow the “good faith effort” exception to be used to avoid this alignment.

The emphasis on prospective identification of ACO patients, where feasible, will enhance providers’ ability to track, assess and improve the care they deliver to patients in their ACO panels.

As important as these requirements is the strong emphasis on patient-centered criteria and accountability to a meaningful set of quality metrics that include patient experience of care. The assessment of patient experience is essential to determining whether ACOs ultimately deliver better care and outcomes from the patient perspective.

Furthermore, the inclusion of both a patient representative and a consumer advocate on the ACO governing board is critical to ensuring that ACOs are dedicated to serving the needs of their communities and putting patients first as they redesign the care delivery process. We cannot truly achieve a patient-centered system unless we involve patients and consumers in the governance and design process—right from the start. Patients have a unique perspective that comes from being the only person at the interface of all facets of their care. They are the best judges of whether the care they get is well coordinated, meets their needs and enables them to maximize their health.

Experienced consumer advocates can be key allies in ensuring that ACOs are serving and improving the health of all segments of a community. They can also facilitate consumer education and engagement in this new model of care.

It’s too soon to predict the impact of ACOs, and there is also a need to remain vigilant—especially with respect to the potential for Pioneer ACOs to increase the market concentration of existing large health systems and to use their market power to raise prices or engage in anti-competitive conduct.

But there is cause for encouragement. We think the Pioneer ACOs will be on the right track to realize the promise of better care and better value for our health care dollars. If that proves to be right, our nation will be much better off.

An excellent description of ACOs but I am reminded of how we can kludge together a complicated solution to a problem that has a simple answer. Is the purpose of the ACO to assure appropriate care or to control costs. If the former, then we should address physicians treating appropriately directly without contorted payment schemes or other administrative nonsense. If the purpose is to control costs then we should simply hunker down and prepare for rationing of medical care.

Allow me to suggest that we put aside all the complicated mechanisms that health care experts propose and concentrate first on how to ask physicians to treat appropriately. In the ideal world where physicians eliminated all the over treatment and treated appropriately, we could cut 40% of medical losses. Somehow I don’t think we will see either from ACOs.

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